Pensioners living in the European Union (EU) will not have their pensions ‘frozen’ once the UK leaves, the British government has indicated.
An as yet unratified agreement between the British government and the EU means that British pensioners who live in the EU will continue to see their state pension payments increased each year after Brexit
It had been feared that state pensions could be frozen once the UK leaves the EU, meaning they wouldn’t be subject to the same cost of living increases than those still living in the UK would be. This is currently the case for British pensioners living in a number of countries, including Canada, Australia and New Zealand.
"The UK and EU have agreed that the UK will continue paying and uprating state pensions to UK citizens living in EU countries after Brexit – and vice versa,” said James Walsh, of trade body, the Pensions and Lifetime Savings Association. “This means, for example, that British pensioners living in Spain will continue to get the same annual inflation increases they would have received in the UK. The same will apply to Spanish pensioners resident in Britain," he added.
The agreement will also cover expats who live in countries that are part of the European Economic Area (EEA) – Norway, Iceland and Lichtenstein – as well as Switzerland.
Although the agreement still has to be officially confirmed, it is believed that future state pension increases are unlikely to be a problem point in the negotiations now that a deal has been struck.
Read more about planning for expat life after Brexit by Peter Robinson of the Association of International Property Professionals (AIPP) in Vision: Brexit –
Halo Financial’s quarterly Brexit report.